Multi-asset  

Fund review: AXA lifetime distribution

Fund review: AXA lifetime distribution

AXA Wealth has unveiled a new fund in response to the retirement freedoms. The AXA Lifetime Distribution fund, managed by AXA Investment Managers, will initially only be available through the AXA Wealth platform until 28 August but will then be rolled out onto other platforms.

The cautiously managed portfolio is essentially a multi-asset fund that will seek to offer investors the opportunity to take monthly income and provide the opportunity for capital growth.

The fund will be led by manager Richard Marwood, and will invest in large-cap UK equities and UK government index-linked gilts. It aims to seek diversification for those looking for lower volatility. The fund will be managed with a long-term investment horizon and any index-linked gilts held will be managed on a ‘buy and maintain’ basis in order to reduce any trading costs – keeping the portfolio charges low.

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The fund will sit in the IA Mixed Investment 20-60 per cent Shares sector and be benchmarked against two indices, the FTSE All Share Total Return Gross (55 per cent) and the FTSE Actuaries UK Gilts Index-Linked Stocks (45 per cent). Annual charges for the fund begin at 0.32 per cent and will be available in both income and accumulation share types.

Comment:

This is definitely not the first multi-asset fund rebranded as a retirement freedoms product in the wake of 6 April. But this fund is slightly different in that it only invests in “safer” assets such as gilts and large-cap equities.

For investors looking for an alternative to the traditional annuity and who want to maintain a level of income, a fund like this could be the answer. Its costs are cheaper than many multi-asset funds, which can get quite expensive depending on the number and type of assets they invest in.

Many retirees may want the security of income but do not like the inflexibility that comes with an annuity, so investing in a multi-asset fund is one way forward.